Small-town banks in suburban Philadelphia continue their consolidation: Penn Community Bank, a Doylestown-based, depositor-owned mutual savings bank formed two years ago by the merger of banks in Bristol and Perkasie, has agreed to enter Montgomery County by merging with Chelten Hills Savings Bank, of Abington.

Penn Community and its 300 employees manage nearly $2 billion in loans and other assets at 23 branches across Bucks County. Chelten Hills has around $26 million in assets at its single office, down from $36 million in 2013, and posted a small loss last year.

Chelten Hills president and CEO W. Russell Koerwer.

"Our customers' financial needs have evolved," Chelten Hills president and CEO W. Russell Koerwer said in a statement. Bank users "want all the convenience of modern banking services," though still "with the personal touch that only a community bank can provide." He said Penn Community offers "the best of both."

Community banks with less than $1 billion in assets have had a tough time making money in recent years. The real estate financial crisis of the late 2000s left many suburban properties worth less than the debt their owners accumulated during the preceding boom, low interest rates and tighter government rules have squeezed profit margins, and bank customers have migrated away from branches toward online and smartphone-based services. These trends have fed a string of bank mergers and consolidations. Penn Community was created in 2015 from the merger of First Federal Savings and Loan Association, Bristol, with First Savings Bank of Perkasie.

Penn Community boss Jeane Coyle hopes Chelten Hills customers will stick around for "long-lasting relationships," she said in a statement. The boards of Penn Community and Chelten Hills support their deal and hope to close it by the end of the year, pending state and FDIC approval. Koerwer, who heads the Eastern Montgomery County Chamber of Commerce board, plans to retire from the bank once the merger is done.